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Council approves support of sales tax measure

A resolution supporting a measure that would require Internet businesses to collect and remit sales tax to the buyer’s state was approved by the Bartlesville City Council during a meeting Monday.

Councilor Dale Copeland presented information on H.R. 684 Marketplace Fairness Act by Rep. Steve Womak (R-Ark.) and 47 co-sponsors. Copeland said the House of Representatives measure is mirrored in the Senate by Senate Bill 336, which has essentially the same language.

“This is something that I’ve worked on for quite a long time,” Copeland said. “Competition is a great thing; it’s something that’s made this country what it is.

“We have a situation going back several years with the advent of the Internet, which has just exploded and blossomed and done quite well, and that’s a good thing. It gives us more choice, but it has also brought about some challenges that didn’t exist prior to that.”

Online businesses that do not have a presence in a state are not required under federal law to collect and remit sales tax to the state in which goods are sold.

In Oklahoma, cities rely on sales tax for operations and are negatively impacted when sales tax is lost through a loophole, Copeland explained.

He said the measure asks for fairness; it does not bring about a new tax or an Internet tax and it allows states to collect the tax that’s already owed from the business.

Currently, the Oklahoma tax return has a line for consumers to declare any tax-free purchases that were made online so the consumer can remit the owed taxes to the state. Copeland said a small percentage of Oklahomans remit the tax and many are unaware that they need to pay it.

It is estimated that the City of Bartlesville loses $890,000 in sales tax revenue yearly to online sales and that cities and towns in Oklahoma lose an estimated total of $85.5 million annually.

Mayor Tom Gorman noted that Oklahoma is a rarity in the nation in that primarily the cities are reliant solely on sales tax for operational needs.

“The impact of not collecting sales tax is greater here to our city — and every other city in the state of Oklahoma — than it is to other states in the nation,” Gorman said.